PublicPrivate Partnerships for Sustainable Development Mr Geoffrey Hamilton

Public-Private Partnerships for Sustainable Development Mr. Geoffrey Hamilton Chief, Cooperation and Partnerships Section United Nations Economic Commission for Europe _________________________ ‘Agenda 21 and the Information Society’, Mini Conference, December 13 th 2007 1

POSITION IN A NUTSHELL • • PPPs can be a tool for Sustainable Development However, Governments and private sector have other priorities Need to cross the divide between the ‘world of finance’ and ‘sustainable development’ Can ICT help ? 2

WHAT IS A PPP? • The term PPP is used internationally with a wide variety of meanings, but for this purpose… = partnership – PPP = private investment in public infrastructure + long-term service provision + risk transfer to private sector 3

WHY PPP? WHY • Access to capital • Certainty of Outcome • Off balance sheet borrowing • Innovation • Transfer of risk 4

THE GROWTH OF PPPs IN EMERGING MARKETS 3 Distinct Evolutionary Phases Stage One Stage Two Stage Three • Define policy framework • Introduce legislative reform • Fully defined, comprehensive “system” • Test legal viability • Publish policy and practice guidelines • Legal impediments removed • Identify project pipeline • Develop foundation concepts (PSCs etc) • Apply lessons from earliest deals to other sectors • Start to build marketplace • Establish dedicated PPP units • Refine PPP delivery models • Continue to foster marketplace • Expand project pipeline • extend to new sectors • Leverage new sources of funds • PPP models refined and reproduced • Sophisticated risk allocation • Committed, long-term deal flow • Long-term political consensus • Use of full-range of funding sources • Thriving infrastructure investment market involving pension funds and privateequity funds • Well-trained civil service applying lessons from PPP experience 5

PPP MARKET MATURITY CURVE 6

CURRENT CHALLENGE • Sustainable Development is not a priority • Financing issues are paramount • PPP issue is dealt with by Finance Ministry not Environment 7

HOW CAN WE ADDRESS THE CHALLENGE • Is it a challenge for governments or the private sector? • UNECE guidelines and training 8

UNECE GUIDELINES ON PROMOTING GOOD GOVERNANCE IN PPPs 7 PRINCIPLES j A coherent PPP policy k Strong enabling institutions l Legal framework “fewer, better, simpler” m Cooperative risk sharing and mutual support n Transparency in partner section o Putting people first p Achieving sustainable development 9

Misconceptions… PPP pilots will start the process… No! You need a policy framework with direction, responsibilities and goals. PRINCIPLE 1. POLICY 10

Principle 1. PPP Policy • A PPP Policy is needed to fix a “roadmap” • Strong social objectives, e. g. increasing accessibility for disadvantaged • Core values and principles (fairness, continuation of services, improved quality) • Consultation within Government • Consult investor community • Identify the right projects to get started 11

Misconceptions… PPPs focus on ring fencing the project… No! You need to build the skills within the government and set up the right institutions. PRINCIPLE 2. CAPACITY BUILDING 12

Principle 2. Capacity-Building INTERNALLY • Train personnel for the required skills for PPPs • Establish PPP Unit • Offer National PPP training programmes, guidelines EXTERNALLY • At same time use qualified consultants to help on projects 13

Misconceptions… PPPs … prescriptive rules and tight control… No! Overall framework should be simpler, fewer and better. PRINCIPLE 3. LEGAL 14

Principle 3. Legal ‘Fewer, better and simpler’ • Fewer laws - removal of constraints • Better laws - knowable, secure and predictable • Simpler laws - bundling projects, ‘competitive dialogue’ 15

Misconceptions… PPPs provide assets to governments at no risk and no cost No! Governments must assume some risk and offer some subsidy. PRINCIPLE 4. RISK SHARING 16

Principle 4. Risk • • Cooperative sharing and mutual support Risk sharing key to PPP success No science to allocating risks Yes to some government subsidy but with care 17

Misconceptions… PPPs …no tender required… No! Competition allows for the best partner and the best project. PRINCIPLE 5. PROCUREMENT 18

Principle 5. Procurement • • • Open and transparent Opportunities should be made public Non-discrimination Zero tolerance to corruption Choosing the right partners 19

Misconceptions… Keep people out: they do not understand the technical matters… No! People have to be put first. PRINCIPLE 6. PUTTING PEOPLE FIRST 20

Principe 6. Putting People First • • • Define the public interest Consult with people Inform: disclose information in contracts Oversee by objective third party Involve independent auditors 21

Misconceptions… …you have to choose between profit and social and environment development… No! Project can make profit and achieve social and environmental goals. PRINCIPLE 7. ENVIRONMENT 22

Principle 7. Environment • The ‘Green case’ works for PPPs • Provide incentives to the private sector to adopt green criteria • Avoid politically correct ‘add ons’ that mean nothing 23

CASE STUDIES Applying the” Good Governance” principles brings you success! Canada France Israel Tajikistan USA Vancouver Landfill project Centre Hospitalier Sud Francilien Cross-Israel highway Pamir Power project Chesapeake Forest project 24

HOW WE IMPLEMENT THE UNECE GUIDELINES? • Our focus is on training • Development of training modules • Moscow event training (September 2008) • We can learn from Aahrus convention, ICT and use other tools 25

HOW TO USE ELECTRONIC TOOLS TO IMPLEMENT GUIDELINES ON PPPS SO SUSTAINABLE DEVELOPMENT IS SERVED Display of third parties’ comments on progress and good examples of public consultation • Portal on good practice in public participation through PPP case studies • Publicizing success: the ‘carrot’, rather than the stick! 26

IN CONCLUSION PPPs AND SUSTAINABLE DEVELOPMENT • UNECE Guidebook on Promoting Good Governance in PPPs a starting point • Our Guidance would be more effective for sustainable development if we use ICT • Convention’s Task force’s advice on doing this would be welcome! 27

THANK YOU FOR YOUR ATTENTION! http: //www. unece. org/ceci/ppp. html Contact: geoffrey. hamilton@unece. org 28